The universe of Democratic senators concerned about raising the corporate tax rate to 28% is broader than Senator Joe Manchin, and the rate is likely to land at 25%, parties close to the discussion say Axios.
Why it matters: While increasing the rate from 21% to 25% over 15 years would raise about $ 600 billion, President Biden would fail to pay for his proposed eight-year infrastructure package of $ 2.25 trillion.
- Biden’s plan to increase the rate US multinationals pay for their overseas revenue from 10.5% to 21% is less controversial and has a better chance of staying intact in the final legislation. That would bring in an additional $ 700 billion.
- But corporate lobby groups are preparing for a long-term battle for both rates.
- The Business Roundtable launched an advertising campaign last week and published a survey of 178 CEOs that discussed how the proposed changes would affect their company’s competitiveness.
The big picture: The White House has not publicly withdrawn from the president’s proposed 28% rate, but has said it is ready to find a compromise to pay for its spending plans.
- Democrats near the White House expect Biden to accept 25% and pocket it as a political gain.
- President Trump cut the rate from 35% to 21%.
Driving messages: A collection of 10 senators from both parties – the so-called 20-member group – is working to find a compromise on what to include in an initial infrastructure package and how to pay for it.
- “If we come together in a non-partisan way to pass the $ 800 billion bill you mentioned for the hard infrastructure that I have requested, then we will show our employees that we can solve their problems,” said Senator Chris Coons (D – Del.) Said on “Fox News Sunday”.
- Senator Susan Collins (R-Maine) crystallized the G-20’s challenge by breaking it down into three points: scope, size, and pay.
- “It’s much easier to come up with decent compensation and bipartisan agreements when we’re talking about a more focused package that really focuses on infrastructure,” she said last Thursday.
Between the lines: While Manchin (DW.Va.) has made his preference for a 25% rate clear, he’s far from being alone.
- Democrats who have privately hinted they might be uncomfortable hitting 28% include Sens. Tim Kaine and Mark Warner of Virginia, Kyrsten Sinema of Arizona, and Jon Tester of Montana.
- The democratic dynamic is similar to that of raising the minimum wage to $ 15 an hour, which was ultimately rejected by eight Senate Democrats.
- Some of them talked about something closer to $ 11.
Go deeper: There is a similar mood in the house, where moderates are also against an excessive tax hike, Axios reported.
- “I think 25% is fine,” said Rep. Scott Peters (D-Calif.).
Be smart: Democrats view the corporate rate debate as a litmus test of Republican interest in bipartisanism during the Biden era.
- When they strike a middle ground, they hope to work on other topics.
- However, many are skeptical, even as Republicans say infrastructure spending is badly needed.
- Failure to reach consensus on this would only fuel calls for the budget vote to be used to work through other spending plans.